PNHP

Why it is difficult to make sense of the claims and counter-claims of single payer financing

Why it is difficult to make sense of the claims and counter-claims of single payer financing

Single-payer health plan wouldn’t cost U.S. more

By Steffie Woolhandler and David U. Himmelstein
Philadelphia Inquirer, February 5, 2016

In our “read my lips/over my dead body” political culture, the threat of tax increases usually shuts down proposals for single-payer national health insurance. Lately, conservative pundits – and even liberals like Hillary Clinton – have been repeating the mantra that single-payer insurance would break the bank.

Never mind that Canadians, Australians, and Western Europeans spend about half what we do on health care, enjoy universal coverage, and are healthier. Their health-care taxes are higher.

Or are they? According to our study in the current issue of the American Journal of Public Health, American taxpayers picked up 65 percent of the total health-care tab last year – a figure that will soon rise to 67 percent.

We paid $2.1 trillion in taxes to fund health care – $6,560 per person. That’s more per capita than Canadians or people in any other nation pay. Indeed, our tax-financed health-care bill is higher than total health spending (private as well as public) in any other nation except Switzerland.

Official accounts from agencies like the Department of Health and Human Services peg taxpayers’ share of U.S. health spending at about 45 percent, a figure that includes Medicare, Medicaid, the Centers for Disease Control and Prevention, and Veterans Affairs. However, this kind of tally omits two important items.

First, it leaves out government spending to buy private health coverage for public employees like teachers, firefighters, and members of Congress. Indeed, government employers account for 28 percent of all employer health spending.

Second, it excludes tax subsidies for private employer-paid plans and other privately paid care – $326 billion last year – that mainly benefit affluent families.

Omitting these government expenditures from the official health-spending tabulations obscures the fact that our health-care system is already about two-thirds publicly funded. In contrast, the Office of Management and Budget, not to mention most health-policy experts, considers tax subsidies for private insurance to be tax expenditures.

Even many uninsured families pay thousands of dollars in taxes for the health care of others.

More than one-third of these tax dollars meander through private insurers on the way to the bedside. These private insurers siphon off 12 percent for their overhead and profits (vs. 2 percent in the Medicare program) and also inflict huge paperwork costs on doctors and hospitals. A shift to single-payer national health insurance would save at least $400 billion annually on paperwork alone, enough to cover all of the uninsured and eliminate co-payments and deductibles for the rest of us.

That means a national single-payer plan wouldn’t cost Americans any more than we’re currently spending. Moreover, the taxes to pay for it would be fully offset by the savings from eliminating private insurance premiums.

Moving from our current level of tax financing, 65 percent, to Canada’s 70.7 percent would mean a tax increase of about $185 billion per year. But Americans would save at least that much on premiums. The vast majority of American households would come out ahead financially, and everyone would be covered.

Drug and insurance firms that would lose billions under single-payer health coverage generously fund its detractors (including Clinton, who has gotten more health-industry dollars than any other presidential candidate). These naysayers suggest that a single-payer plan (or “Medicare for all,” as Bernie Sanders likes to call it) would downgrade Americans’ coverage, and they also raise the specter of big tax increases.

But a national single-payer plan would give all Americans the first-dollar coverage enjoyed by Canadians and Brits, and guarantee them a free choice of doctors and hospitals – a choice that private insurers currently deny to many of us.

Surprisingly, American taxpayers already pay enough to fund national health insurance. We just don’t get it.

Steffie Woolhandler, M.D. and David U. Himmelstein, M.D. are professors of health policy and management at the City University of New York School of Public Health and lecturers in medicine at Harvard Medical School.

http://www.philly.com/philly/opinion/20160205_Single-payer_health_plan_wouldn_t_cost_U_S__more.html

***

Comment:

By Don McCanne, M.D.

There are two important reasons for distributing this update on how much we spend in taxes for the health system. One is that most people do not realize how much they are already spending for health care through mostly opaque tax policies – approaching two-thirds of our national health expenditures! Right now the more important reason is that people are bashing single payer reform with reports and articles based on selected taxes drawn from single payer financing proposals – particularly countering the brief single payer proposal from a leading candidate for the Democratic nomination for President. Misinformation is rampant.

A big part of the problem is that most people have no idea what they are currently spending on health care, especially since most of it is hidden in our taxes. So when people “analyze” the single payer proposals by pulling out the various taxes, adding them up, along with recalculating upward what the expenditures would be under single payer, ignoring the savings that are already firmly established in the policy literature, then calculating the deficits in the federal budget that would result, and then projecting that out over ten years – the cumulative total is in the trillions – an almost incomprehensible number. Scary.

When individuals compare those enormous numbers with what they know they are currently spending – employee share of the premium for employer-sponsored plans, deductibles and copayments, and Medicare payroll taxes – they do not realize that this is only a small part of what they are actually paying, so the single payer taxes appear to be horrendous to them. Little do they realize that, with our current system, we will be spending about 43 trillion dollars on health care over the next decade, and much of the spending will be opaque to individuals and their families (since, again, two-thirds is paid through the tax system).

We now have claims on one side that the costs of single payer are egregiously high, and on the other that the savings for individuals and families will be phenomenal – conclusions that are reached by playing with these numbers. In fact, well designed single payer models save typical individuals and families an average of about 5 percent from their current total spending (including the hidden costs). Only very high income individuals would pay more.

By losing people in the fog of these incomprehensible numbers, the opponents are able to suppress discussion of the more important reasons why we should enact a single payer system: absolutely everyone is covered, deductibles and other financial barriers to care are greatly reduced or eliminated, free choice of health care professionals and hospitals is returned to patients, central planning ensures adequate but not excessive capacity in the system, excessive prices are reduced to fair levels, and economic policies are put in place that slow health care inflation to sustainable levels.

Do not get hung up on the numbers, Just remember that most people will see better numbers, whether they recognize them or not,  while everyone will see a superior health care system. And that is what single payer is all about.

Physicians for a National Health Program (PNHP) is a nonpartisan educational organization. It neither supports nor opposes any candidates for public office.

Single-payer health plan wouldn’t cost U.S. more

By Steffie Woolhandler and David U. Himmelstein
The Philadelphia Inquirer, Philly.com, Feb. 5, 2016

In our “read my lips/over my dead body” political culture, the threat of tax increases usually shuts down proposals for single-payer national health insurance. Lately, conservative pundits – and even liberals like Hillary Clinton – have been repeating the mantra that single-payer insurance would break the bank.

Never mind that Canadians, Australians, and Western Europeans spend about half what we do on health care, enjoy universal coverage, and are healthier. Their health-care taxes are higher.

Or are they? According to our study in the current issue of the American Journal of Public Health, American taxpayers picked up 65 percent of the total health-care tab last year – a figure that will soon rise to 67 percent.

We paid $2.1 trillion in taxes to fund health care – $6,560 per person. That’s more per capita than Canadians or people in any other nation pay. Indeed, our tax-financed health-care bill is higher than total health spending (private as well as public) in any other nation except Switzerland.

Official accounts from agencies like the Department of Health and Human Services peg taxpayers’ share of U.S. health spending at about 45 percent, a figure that includes Medicare, Medicaid, the Centers for Disease Control and Prevention, and Veterans Affairs. However, this kind of tally omits two important items.

First, it leaves out government spending to buy private health coverage for public employees like teachers, firefighters, and members of Congress. Indeed, government employers account for 28 percent of all employer health spending.

Second, it excludes tax subsidies for private employer-paid plans and other privately paid care – $326 billion last year – that mainly benefit affluent families.

Omitting these government expenditures from the official health-spending tabulations obscures the fact that our health-care system is already about two-thirds publicly funded. In contrast, the Office of Management and Budget, not to mention most health-policy experts, considers tax subsidies for private insurance to be tax expenditures.

Even many uninsured families pay thousands of dollars in taxes for the health care of others.

More than one-third of these tax dollars meander through private insurers on the way to the bedside. These private insurers siphon off 12 percent for their overhead and profits (vs. 2 percent in the Medicare program) and also inflict huge paperwork costs on doctors and hospitals. A shift to single-payer national health insurance would save at least $400 billion annually on paperwork alone, enough to cover all of the uninsured and eliminate co-payments and deductibles for the rest of us.

That means a national single-payer plan wouldn’t cost Americans any more than we’re currently spending. Moreover, the taxes to pay for it would be fully offset by the savings from eliminating private insurance premiums.

Moving from our current level of tax financing, 65 percent, to Canada’s 70.7 percent would mean a tax increase of about $185 billion per year. But Americans would save at least that much on premiums. The vast majority of American households would come out ahead financially, and everyone would be covered.

Drug and insurance firms that would lose billions under single-payer health coverage generously fund its detractors (including Clinton, who has gotten more health-industry dollars than any other presidential candidate). These naysayers suggest that a single-payer plan (or “Medicare for all,” as Bernie Sanders likes to call it) would downgrade Americans’ coverage, and they also raise the specter of big tax increases.

But a national single-payer plan would give all Americans the first-dollar coverage enjoyed by Canadians and Brits, and guarantee them a free choice of doctors and hospitals – a choice that private insurers currently deny to many of us.

Surprisingly, American taxpayers already pay enough to fund national health insurance. We just don’t get it.

Steffie Woolhandler, M.D., and David U. Himmelstein, M.D., are professors of health policy and management at the City University of New York School of Public Health and lecturers in medicine at Harvard Medical School.

http://www.philly.com/philly/opinion/20160205_Single-payer_health_plan_wouldn_t_cost_U_S__more.html

Why it is difficult to make sense of the claims and counter-claims of single payer financing

Single-payer health plan wouldn’t cost U.S. more

By Steffie Woolhandler and David U. Himmelstein
Philadelphia Inquirer, February 5, 2016

In our “read my lips/over my dead body” political culture, the threat of tax increases usually shuts down proposals for single-payer national health insurance. Lately, conservative pundits – and even liberals like Hillary Clinton – have been repeating the mantra that single-payer insurance would break the bank.

Never mind that Canadians, Australians, and Western Europeans spend about half what we do on health care, enjoy universal coverage, and are healthier. Their health-care taxes are higher.

Or are they? According to our study in the current issue of the American Journal of Public Health, American taxpayers picked up 65 percent of the total health-care tab last year – a figure that will soon rise to 67 percent.

We paid $2.1 trillion in taxes to fund health care – $6,560 per person. That’s more per capita than Canadians or people in any other nation pay. Indeed, our tax-financed health-care bill is higher than total health spending (private as well as public) in any other nation except Switzerland.

Official accounts from agencies like the Department of Health and Human Services peg taxpayers’ share of U.S. health spending at about 45 percent, a figure that includes Medicare, Medicaid, the Centers for Disease Control and Prevention, and Veterans Affairs. However, this kind of tally omits two important items.

First, it leaves out government spending to buy private health coverage for public employees like teachers, firefighters, and members of Congress. Indeed, government employers account for 28 percent of all employer health spending.

Second, it excludes tax subsidies for private employer-paid plans and other privately paid care – $326 billion last year – that mainly benefit affluent families.

Omitting these government expenditures from the official health-spending tabulations obscures the fact that our health-care system is already about two-thirds publicly funded. In contrast, the Office of Management and Budget, not to mention most health-policy experts, considers tax subsidies for private insurance to be tax expenditures.

Even many uninsured families pay thousands of dollars in taxes for the health care of others.

More than one-third of these tax dollars meander through private insurers on the way to the bedside. These private insurers siphon off 12 percent for their overhead and profits (vs. 2 percent in the Medicare program) and also inflict huge paperwork costs on doctors and hospitals. A shift to single-payer national health insurance would save at least $400 billion annually on paperwork alone, enough to cover all of the uninsured and eliminate co-payments and deductibles for the rest of us.

That means a national single-payer plan wouldn’t cost Americans any more than we’re currently spending. Moreover, the taxes to pay for it would be fully offset by the savings from eliminating private insurance premiums.

Moving from our current level of tax financing, 65 percent, to Canada’s 70.7 percent would mean a tax increase of about $185 billion per year. But Americans would save at least that much on premiums. The vast majority of American households would come out ahead financially, and everyone would be covered.

Drug and insurance firms that would lose billions under single-payer health coverage generously fund its detractors (including Clinton, who has gotten more health-industry dollars than any other presidential candidate). These naysayers suggest that a single-payer plan (or “Medicare for all,” as Bernie Sanders likes to call it) would downgrade Americans’ coverage, and they also raise the specter of big tax increases.

But a national single-payer plan would give all Americans the first-dollar coverage enjoyed by Canadians and Brits, and guarantee them a free choice of doctors and hospitals – a choice that private insurers currently deny to many of us.

Surprisingly, American taxpayers already pay enough to fund national health insurance. We just don’t get it.

Steffie Woolhandler, M.D. and David U. Himmelstein, M.D. are professors of health policy and management at the City University of New York School of Public Health and lecturers in medicine at Harvard Medical School.

http://www.philly.com/philly/opinion/20160205_Single-payer_health_plan_wouldn_t_cost_U_S__more.html

There are two important reasons for distributing this update on how much we spend in taxes for the health system. One is that most people do not realize how much they are already spending for health care through mostly opaque tax policies – approaching two-thirds of our national health expenditures! Right now the more important reason is that people are bashing single payer reform with reports and articles based on selected taxes drawn from single payer financing proposals – particularly countering the brief single payer proposal from a leading candidate for the Democratic nomination for President. Misinformation is rampant.

A big part of the problem is that most people have no idea what they are currently spending on health care, especially since most of it is hidden in our taxes. So when people “analyze” the single payer proposals by pulling out the various taxes, adding them up, along with recalculating upward what the expenditures would be under single payer, ignoring the savings that are already firmly established in the policy literature, then calculating the deficits in the federal budget that would result, and then projecting that out over ten years – the cumulative total is in the trillions – an almost incomprehensible number. Scary.

When individuals compare those enormous numbers with what they know they are currently spending – employee share of the premium for employer-sponsored plans, deductibles and copayments, and Medicare payroll taxes – they do not realize that this is only a small part of what they are actually paying, so the single payer taxes appear to be horrendous to them. Little do they realize that, with our current system, we will be spending about 43 trillion dollars on health care over the next decade, and much of the spending will be opaque to individuals and their families (since, again, two-thirds is paid through the tax system).

We now have claims on one side that the costs of single payer are egregiously high, and on the other that the savings for individuals and families will be phenomenal – conclusions that are reached by playing with these numbers. In fact, well designed single payer models save typical individuals and families an average of about 5 percent from their current total spending (including the hidden costs). Only very high income individuals would pay more.

By losing people in the fog of these incomprehensible numbers, the opponents are able to suppress discussion of the more important reasons why we should enact a single payer system: absolutely everyone is covered, deductibles and other financial barriers to care are greatly reduced or eliminated, free choice of health care professionals and hospitals is returned to patients, central planning ensures adequate but not excessive capacity in the system, excessive prices are reduced to fair levels, and economic policies are put in place that slow health care inflation to sustainable levels.

Do not get hung up on the numbers, Just remember that most people will see better numbers, whether they recognize them or not,  while everyone will see a superior health care system. And that is what single payer is all about.

Physicians for a National Health Program (PNHP) is a nonpartisan educational organization. It neither supports nor opposes any candidates for public office.

The ‘State’ of Health-Care Reform: Activists Push for Universal Primary Care in Vermont

By Michael Corcoran
Truthout, Feb. 3, 2016

When Vermont’s plan for a public, universal health-care system died in late 2014 it was a major blow to single-payer activists everywhere. Conservatives tap-danced on the proposal’s grave, and wrongly claimed that its death was proof that single-payer could never work. Progressives were put on the defensive, dealing with the pain of losing an extended, promising battle, plus an influx of even more misinformation about the economics of public health care.

The woeful state of health care in the United States, however, has kept the dream of joining the rest of the developed world in having universal public health care alive as an urgent priority for activists in Vermont and elsewhere. And so, advocates of health-care justice in Vermont, not inclined to disengage from the process, have advanced a new proposal: statewide “universal primary care.” The plan would offer primary care – including some mental health and substance abuse treatment – to every single Vermonter regardless of their ability to pay.

Supporters of this proposal know it falls well short of reforming the state’s entire $5 billion health insurance industry, but hope it offers a new path toward that goal. Advocates for the policy point to the history of Canada’s universal system, which is rooted in the Saskatchewan policy that made hospital care universal in 1947. Moreover, according to a recently published study commissioned by the Vermont Legislature, the plan would be affordable and cost-effective, ultimately saving the state money that is now wasted due to the woefully inefficient nature of private insurance.

Vermont’s continued reform efforts reflect an important trend in health-care reform; states are trying to succeed where the federal government has failed, in terms of paving a path toward universal coverage. As Truthout reported in October 2015, activists in Colorado recently put a single-payer plan on the ballot in 2016 via a statewide referendum. Other states, including New Mexico, New York, Maryland and Oregon, are also fighting for single-payer in a variety of ways. But most Washington, DC, politicians are toothless on this issue, lacking the political will to stand up to the powerful drug and insurance industries while also placing many logistical barriers in the way of statewide reform efforts. As a result, the battle for universal health care in the states is an important part of the much larger fight for social justice.

‘Salvaging Something’ From Failed Reform Efforts

When Vermont Gov. Peter Shumlin announced that he would no long pursue a major overhaul of his state’s system, “the single-payer movement sort of crashed and burned in Vermont,” said Dr. Deb Richter, a longtime local advocate of single-payer legislation, in an interview with Truthout.

Richter certainly had her fair share of skin in the game. Richter, according to Vermont journalist and policy analyst Hamilton Davis, “has been one of the leading proponents of single-payer health-care reform for two decades.” She was so committed to the issue that she toyed with the idea of running for lieutenant governor of Vermont in 2008 to push the issue forward, before deciding against it. In the 2010 gubernatorial campaign, she was among many doctors who endorsed Shumlin, saying he was “the only candidate who has shown unwavering support for a publicly financed universal health-care system in Vermont.” Her engagement didn’t skip a beat when Green Mountain Care hit the wall – she was testifying for other means to improve health care at the State House within two months of its demise.

Full text, with many hotlinks:
http://www.truth-out.org/news/item/34678-the-state-of-health-care-reform-activists-push-for-universal-primary-care-in-vermont

Insurers avoiding some of the sickest patients by using broker disincentives

Licking Wounds, Insurers Accelerate Moves To Limit Health-Law Enrollment

By Jay Hancock
Kaiser Health News, February 4, 2016

Stung by losses under the federal health law, major insurers are seeking to sharply limit how policies are sold to individuals in ways that consumer advocates say seem to discriminate against the sickest and could hold down future enrollment.

In recent days Anthem, Aetna and Cigna, all among the top five health insurers, told brokers they will stop paying them sales commissions to sign up most customers who qualify for new coverage outside the normal enrollment period, according to the companies and broker documents.

Last year, these “special enrollment” clients were much more expensive than expected because lax enforcement allowed many who didn’t qualify to sign up, insurers said. Nearly a million special-enrollment customers selected plans in the first half of 2015, half of them after losing previous coverage.

In addition, Cigna and Humana, another big health insurer, have ceased paying brokers to sell many higher-benefit “gold” marketplace plans for individuals and families while continuing to pay commissions on more-profitable, lower-benefit “bronze” plans, according to documents and interviews.

Gold plans typically enroll sicker members than do less comprehensive policies, say insurance experts. As of June, more than 695,000 people had enrolled in gold plans.

But the retreat from broker sales, which includes last year’s decision by No. 1 carrier UnitedHealthcare to suspend almost any commissions for such business, erodes a pillar of the health law: that insurers must sell to all customers no matter how sick, consumer advocates say.

By inducing brokers to avoid high-cost members — whether in gold plans or special enrollment — the moves limit access to coverage and discriminate against those with greater medical needs, said Timothy Jost, a law professor at Washington and Lee University and an authority on the health law.

“The only explanation I can see for them doing this is risk avoidance — and that is discriminatory marketing and not permitted,” he said. “When people wonder why we’re not getting millions more enrollees in Affordable Care Act health plans, one reason is, the carriers are discouraging it.”

The insurance industry says it is not discriminating but adjusting to market realities including higher-than-expected medical claims and the failure of a government risk-adjustment program called “risk corridors” to cover much of that cost.

“Without making necessary changes to coverage and benefits, there was no way for health plans to remain in the market or to offer the kind of coverage as they had in the past without sustaining huge losses,” said Clare Krusing, spokeswoman for America’s Health Insurance Plans, an industry lobby.

The nonpartisan Congressional Budget Office estimated as recently as last March that 21 million consumers would be enrolled by now in private health insurance plans sold through online marketplaces. Now CBO forecasts 13 million will sign up this year.

Brokers are critical to sign-ups and the success of the health law. For 2014, 44 percent of Kentucky enrollees bought through brokers. So did 39 percent of the California enrollees. No similar figures are available for the marketplace that serves most states, healthcare.gov.

With varying commissions, brokers will be tempted to promote only plans they make money on, even if those aren’t the best for some customers, said John Jaggi, an Illinois broker and consultant.

“Now they’re really forcing the agent to think only of the plan that he gets compensated for,” he said.

http://khn.org/news/licking-wounds-insurers-accelerate-moves-to-limit-health-law-enrollment/

***

Comment:

By Don McCanne, M.D.

No matter what legislation, regulations, rules or advisories our government produces, the private insurance industry will always find ways to skirt the intent of this oversight in order to maximize their business goals, usually at a cost to patients and public and private payers. The current efforts of insurers to manipulate the brokers are a prime example of how they will continue to work the system to advance their own interests.

As the Affordable Care Act was being crafted and then implemented, there was a push to include brokers as intermediaries who would provide customer access to the exchange plans. The argument was that brokers were highly qualified to provide guidance on what the best plans would be for their clients. But little was said about how insurers might  find ways to use the brokers to to their own advantage.

As this article shows, insurers can heavily influence broker behavior through the commissions they grant. The insurers found that people who were signed up during special enrollment periods had greater health care needs and also were more likely to drop out after their needs were met. That’s easy. The insurers stopped paying commissions for most of the plans sold during these special enrollment periods. Also, people enrolling in gold plans, with their higher actuarial values (covered more of the costs), were also using more health care. Again, no problem. Many insurers quit paying commissions for gold plans but continued to pay them for lower actuarial value plans that required patients to pick up more of the costs of health care. Will the broker sell plans without a commission, when an insurer offers a commission for selling their more profitable plans?

Discrimination in the offering of private insurance plans is prohibited, but AHIP – the insurance lobby – says that insurers are not discriminating but rather are merely adjusting to market realities. Clare Krusing – AHIP’s spokesperson – said that there was no way “to offer the kind of coverage as they had in the past (gold or platinum plans) without sustaining huge losses.” It really is about profits, not patients.

And now many politicians and progressive pundits are telling us to build on Obamacare. Forget about single payer because it will “never, ever come to pass.” Instead let’s control costs through higher deductibles and other cost sharing, narrower networks, greater administrative hassles through ACOs and EHRs that keep professionals from tending to their patients, more opaque obstructions that keep sicker patients out of the private plans, more managed care that reduces access, especially to specialized services, *** **** ****, ***** ** ****, and ** ****** *****.

And those asterisks? They are the hidden future policies of the insurers that will further enhance their business models – policies that we can’t even conceive of since they can only be conjured up by the nefarious minds that are currently in control of our health care financing system. Do we really have to have a health care future that will eventually reveal to us what is behind the magic asterisks? Or shall we tell them on their way out the door where to put their asterisks, as we take over and set up our own single payer national health program?

Insurers avoiding some of the sickest patients by using broker disincentives

Licking Wounds, Insurers Accelerate Moves To Limit Health-Law Enrollment

By Jay Hancock
Kaiser Health News, February 4, 2016

Stung by losses under the federal health law, major insurers are seeking to sharply limit how policies are sold to individuals in ways that consumer advocates say seem to discriminate against the sickest and could hold down future enrollment.

In recent days Anthem, Aetna and Cigna, all among the top five health insurers, told brokers they will stop paying them sales commissions to sign up most customers who qualify for new coverage outside the normal enrollment period, according to the companies and broker documents.

Last year, these “special enrollment” clients were much more expensive than expected because lax enforcement allowed many who didn’t qualify to sign up, insurers said. Nearly a million special-enrollment customers selected plans in the first half of 2015, half of them after losing previous coverage.

In addition, Cigna and Humana, another big health insurer, have ceased paying brokers to sell many higher-benefit “gold” marketplace plans for individuals and families while continuing to pay commissions on more-profitable, lower-benefit “bronze” plans, according to documents and interviews.

Gold plans typically enroll sicker members than do less comprehensive policies, say insurance experts. As of June, more than 695,000 people had enrolled in gold plans.

But the retreat from broker sales, which includes last year’s decision by No. 1 carrier UnitedHealthcare to suspend almost any commissions for such business, erodes a pillar of the health law: that insurers must sell to all customers no matter how sick, consumer advocates say.

By inducing brokers to avoid high-cost members — whether in gold plans or special enrollment — the moves limit access to coverage and discriminate against those with greater medical needs, said Timothy Jost, a law professor at Washington and Lee University and an authority on the health law.

“The only explanation I can see for them doing this is risk avoidance — and that is discriminatory marketing and not permitted,” he said. “When people wonder why we’re not getting millions more enrollees in Affordable Care Act health plans, one reason is, the carriers are discouraging it.”

The insurance industry says it is not discriminating but adjusting to market realities including higher-than-expected medical claims and the failure of a government risk-adjustment program called “risk corridors” to cover much of that cost.

“Without making necessary changes to coverage and benefits, there was no way for health plans to remain in the market or to offer the kind of coverage as they had in the past without sustaining huge losses,” said Clare Krusing, spokeswoman for America’s Health Insurance Plans, an industry lobby.

The nonpartisan Congressional Budget Office estimated as recently as last March that 21 million consumers would be enrolled by now in private health insurance plans sold through online marketplaces. Now CBO forecasts 13 million will sign up this year.

Brokers are critical to sign-ups and the success of the health law. For 2014, 44 percent of Kentucky enrollees bought through brokers. So did 39 percent of the California enrollees. No similar figures are available for the marketplace that serves most states, healthcare.gov.

With varying commissions, brokers will be tempted to promote only plans they make money on, even if those aren’t the best for some customers, said John Jaggi, an Illinois broker and consultant.

“Now they’re really forcing the agent to think only of the plan that he gets compensated for,” he said.

http://khn.org/news/licking-wounds-insurers-accelerate-moves-to-limit-health-law-enrollment/

No matter what legislation, regulations, rules or advisories our government produces, the private insurance industry will always find ways to skirt the intent of this oversight in order to maximize their business goals, usually at a cost to patients and public and private payers. The current efforts of insurers to manipulate the brokers are a prime example of how they will continue to work the system to advance their own interests.

As the Affordable Care Act was being crafted and then implemented, there was a push to include brokers as intermediaries who would provide customer access to the exchange plans. The argument was that brokers were highly qualified to provide guidance on what the best plans would be for their clients. But little was said about how insurers might  find ways to use the brokers to to their own advantage.

As this article shows, insurers can heavily influence broker behavior through the commissions they grant. The insurers found that people who were signed up during special enrollment periods had greater health care needs and also were more likely to drop out after their needs were met. That’s easy. The insurers stopped paying commissions for most of the plans sold during these special enrollment periods. Also, people enrolling in gold plans, with their higher actuarial values (covered more of the costs), were also using more health care. Again, no problem. Many insurers quit paying commissions for gold plans but continued to pay them for lower actuarial value plans that required patients to pick up more of the costs of health care. Will the broker sell plans without a commission, when an insurer offers a commission for selling their more profitable plans?

Discrimination in the offering of private insurance plans is prohibited, but AHIP – the insurance lobby – says that insurers are not discriminating but rather are merely adjusting to market realities. Clare Krusing – AHIP’s spokesperson – said that there was no way “to offer the kind of coverage as they had in the past (gold or platinum plans) without sustaining huge losses.” It really is about profits, not patients.

And now many politicians and progressive pundits are telling us to build on Obamacare. Forget about single payer because it will “never, ever come to pass.” Instead let’s control costs through higher deductibles and other cost sharing, narrower networks, greater administrative hassles through ACOs and EHRs that keep professionals from tending to their patients, more opaque obstructions that keep sicker patients out of the private plans, more managed care that reduces access, especially to specialized services, *** **** ****, ***** ** ****, and ** ****** *****.

And those asterisks? They are the hidden future policies of the insurers that will further enhance their business models – policies that we can’t even conceive of since they can only be conjured up by the nefarious minds that are currently in control of our health care financing system. Do we really have to have a health care future that will eventually reveal to us what is behind the magic asterisks? Or shall we tell them on their way out the door where to put their asterisks, as we take over and set up our own single payer national health program?

Disabled on Medicare may not be eligible for Medigap

Buying Supplemental Insurance Can Be Hard For Younger Medicare Beneficiaries

By Susan Jaffe
Kaiser Health News, February 3, 2016

Federal law requires companies to sell Medigap plans to any Medicare beneficiary aged 65 or older within six months of signing up for Part B, which covers doctor visits and other outpatient services. If they sign up during this guaranteed open enrollment, they cannot be charged higher premiums due to their medical conditions.

But Congress left it to states to determine whether Medigap plans are sold to the more than 9 million people younger than 65 years old who qualify for Medicare because of a disability.

In 20 states and the District of Columbia, home to more than 2 million disabled Medicare beneficiaries, insurers are not required to sell Medigap policies to customers under 65. In other states, insurers cannot reject applicants if they enroll when they first join Medicare. Companies in some states, including Virginia, can still charge higher premiums to younger beneficiaries or those with kidney disease, often making policies unaffordable.

In California, Massachusetts and Vermont, insurers are required to sell Medigap policies to anyone with Medicare, except to people… who are under 65 and have end stage renal disease.

The federal health law provides no relief for these younger Medicare beneficiaries. One of its most popular provisions prohibits discrimination by insurance companies in the non-Medicare market based on pre-existing conditions or age, but the law is silent on Medigap.

Prospects for a nationwide solution are dim because expanding Medigap coverage could lead to these beneficiaries with disabilities receiving more care and raising costs for the Medicare program. Congress is looking for strategies to curb Medicare spending, not increase it.

The health insurance industry’s trade association opposes expanding Medigap to include all Medicare beneficiaries younger than 65 with end stage renal kidney disease. Since treatment for those patients can be so expensive, adding them could increase Medigap premiums for everyone, said Cindy Goff, a vice president at America’s Health Insurance Plans.

Older adults are “super price-sensitive” and raising premiums “would basically price them out of being able to get the Medigap protection they want,” said Goff.

http://khn.org/news/buying-supplemental-insurance-can-be-hard-for-younger-medicare-beneficiaries-2/

***

Comment:

By Don McCanne, M.D.

It has long been recognized that the benefits of the Medicare program are inadequate, leaving too many exposed to financial hardship and impaired access due to financial barriers. Some are protected with retiree health benefit plans or with backup by the Medicaid program, but for others, the private Medigap insurance plans were developed. This article shows that the rules for Medigap plan eligibility may still leave vulnerable those who quality for Medicare based on a disability – some of the most neediest of Medicare beneficiaries.

Medigap plans are a poor solution for the inadequacies of Medicare coverage. They are overpriced when considering the benefits received, and are usually unaffordable for those who do not quite qualify for dual Medicare/Medicaid coverage. They add significantly to the administrative complexity of administering Medicare, wasting funds that would be better spent on health care. It would be far more efficient to roll the Medigap benefits into the Medicare program. That would be an important component of the “Improved” in an “Improved Medicare for All” which could be the basis of a single payer national health program.

Congress has left to the states decisions on whether or not private insurers selling Medigap plans must do so on a guaranteed issue basis (plans must be sold to any applicant regardless of medical status), and also if the plans can be subject to medical underwriting (charging higher premiums for those with greater health needs). Just as we see with Medicaid, states under the rule of heartless politicians frequently decide to turn these disabled patients over to the marketplace – further exposing them to a life of physical suffering and financial hardship.

Generally, individuals must purchase their Medigap plans soon after enrolling in Medicare. This applies to both those over 65 and those under 65 with disabilities. The high premiums charged for these plans are one of the many reasons that individuals decide to forgo initial enrollment and then become ineligible later on when medical needs may be even greater. This is yet one more example of a policy that prevents individuals from having access to coverage when our national policies should be designed to achieve the opposite – ensuring enrollment of absolutely everyone, throughout life.

Medigap is another bad idea brought to us by the private insurance industry. It works well for insurers, but not so well for too many patients. We should dump it along with the rest of the private insurance industry and establish our own equitable, publicly-funded and publicly-administered single payer system. How can we leave so many of our disabled residents hanging like we do?

Policymakers should be listening to doctors

By Stephen B. Kemble, M.D.
Honolulu Star-Advertiser, Feb. 3, 2016

Hawaii has a severe doctor shortage and we are losing more doctors every year than we can train.

Doctors also have become increasingly reluctant to accept new patients with Medicare and Medicaid, and now a legislative bill has been introduced to require doctors to accept Medicare as a condition of licensure.

What many fail to understand is that these are not problems with greedy doctors refusing to care for the poor or elderly.

The real issue is abusive managed care practices by many health plans, including the Medicaid- and Medicare-managed care plans.

Now Medicare is pushing payment and delivery system reforms referred to as “value-based” payment, designed to reward doctors financially for delivering less care.

“Value-based” payment can encourage unethical behavior, and so far it is adding administrative burdens but not achieving any of its stated goals of improved care, improved health or reduced cost.

Doctors who fail to adequately computerize and report detailed data to Medicare will receive a 2 percent reduction in fees starting this month, escalating to 9 percent over the next five years.

Prior authorization and documentation demands have been worst for Medicaid managed care and Medicare, and now HMSA is jumping on the same bandwagon for the commercially insured. Physicians now must obtain prior authorizations for almost all advanced imaging studies and a high percentage of the prescriptions they write, including many generics.

Conversion to a much more complex diagnostic coding system last October, complex evaluation/management procedure codes, and data demands for pay-for-performance and risk adjustment, required by “value-based” payment, are forcing doctors to spend much more time on documentation at the expense of listening to and paying attention to their patients.

In my own practice, documentation time has increased by an hour a day since two years ago. My options are to see fewer patients, spend much of each visit charting instead of paying attention to the patient, or stay at work until 8-9 p.m. every night.

A recent Mayo Clinic study found that 55 percent of U.S. doctors suffer from “burnout,” up 10 percent since 2011. Another study showed 28 percent of physicians in training have clinical depression. These are frightening statistics for anyone needing medical care. They also explain why we are losing so many doctors to premature retirement.

Antitrust laws prevent doctors from negotiating collectively with health plans, so their only recourse is to restrict acceptance of abusive plans. If doctors were forced to accept Medicare or Medicaid, the plans would be free to slash fees below cost and implement any managed care policies they wanted, no matter how abusive or unethical.

Instead of forcing doctors to accept health plan abuse, the Legislature and major health plans should be listening to doctors about policies that would enhance their ability to provide better care to their patients. Successful health care reforms anywhere have always been led by physicians, not health insurers or hospitals.

The Abercrombie and Ige administrations and certain legislators have been listening only to the health insurers, resulting in recent health policy initiatives that are piling on administrative burdens, stripping physicians of their professional autonomy and ability to respond to patient needs, restricting access to care for patients, and driving Hawaii doctors out of practice. Meanwhile, the cost of health insurance is rising unabated.

The Hawaii Medical Association has repeatedly offered a physician advisory panel to assist the Ige administration with health policy, but there has been no response so far. The administration and Legislature need to be informed of the effects of policy on the actual care of patients.

Every Hawaii resident will need a doctor someday, so let’s stop driving them out of practice.

Stephen B. Kemble, M.D., is past president of the Hawaii Medical Association.

http://www.staradvertiser.com/editorial/policymakers-should-be-listening-to-doctors/

Disabled on Medicare may not be eligible for Medigap

Buying Supplemental Insurance Can Be Hard For Younger Medicare Beneficiaries

By Susan Jaffe
Kaiser Health News, February 3, 2016

Federal law requires companies to sell Medigap plans to any Medicare beneficiary aged 65 or older within six months of signing up for Part B, which covers doctor visits and other outpatient services. If they sign up during this guaranteed open enrollment, they cannot be charged higher premiums due to their medical conditions.

But Congress left it to states to determine whether Medigap plans are sold to the more than 9 million people younger than 65 years old who qualify for Medicare because of a disability.

In 20 states and the District of Columbia, home to more than 2 million disabled Medicare beneficiaries, insurers are not required to sell Medigap policies to customers under 65. In other states, insurers cannot reject applicants if they enroll when they first join Medicare. Companies in some states, including Virginia, can still charge higher premiums to younger beneficiaries or those with kidney disease, often making policies unaffordable.

In California, Massachusetts and Vermont, insurers are required to sell Medigap policies to anyone with Medicare, except to people… who are under 65 and have end stage renal disease.

The federal health law provides no relief for these younger Medicare beneficiaries. One of its most popular provisions prohibits discrimination by insurance companies in the non-Medicare market based on pre-existing conditions or age, but the law is silent on Medigap.

Prospects for a nationwide solution are dim because expanding Medigap coverage could lead to these beneficiaries with disabilities receiving more care and raising costs for the Medicare program. Congress is looking for strategies to curb Medicare spending, not increase it.

The health insurance industry’s trade association opposes expanding Medigap to include all Medicare beneficiaries younger than 65 with end stage renal kidney disease. Since treatment for those patients can be so expensive, adding them could increase Medigap premiums for everyone, said Cindy Goff, a vice president at America’s Health Insurance Plans.

Older adults are “super price-sensitive” and raising premiums “would basically price them out of being able to get the Medigap protection they want,” said Goff.

http://khn.org/news/buying-supplemental-insurance-can-be-hard-for-younger-medicare-beneficiaries-2/

It has long been recognized that the benefits of the Medicare program are inadequate, leaving too many exposed to financial hardship and impaired access due to financial barriers. Some are protected with retiree health benefit plans or with backup by the Medicaid program, but for others, the private Medigap insurance plans were developed. This article shows that the rules for Medigap plan eligibility may still leave vulnerable those who quality for Medicare based on a disability – some of the most neediest of Medicare beneficiaries.

Medigap plans are a poor solution for the inadequacies of Medicare coverage. They are overpriced when considering the benefits received, and are usually unaffordable for those who do not quite qualify for dual Medicare/Medicaid coverage. They add significantly to the administrative complexity of administering Medicare, wasting funds that would be better spent on health care. It would be far more efficient to roll the Medigap benefits into the Medicare program. That would be an important component of the “Improved” in an “Improved Medicare for All” which could be the basis of a single payer national health program.

Congress has left to the states decisions on whether or not private insurers selling Medigap plans must do so on a guaranteed issue basis (plans must be sold to any applicant regardless of medical status), and also if the plans can be subject to medical underwriting (charging higher premiums for those with greater health needs). Just as we see with Medicaid, states under the rule of heartless politicians frequently decide to turn these disabled patients over to the marketplace – further exposing them to a life of physical suffering and financial hardship.

Generally, individuals must purchase their Medigap plans soon after enrolling in Medicare. This applies to both those over 65 and those under 65 with disabilities. The high premiums charged for these plans are one of the many reasons that individuals decide to forgo initial enrollment and then become ineligible later on when medical needs may be even greater. This is yet one more example of a policy that prevents individuals from having access to coverage when our national policies should be designed to achieve the opposite – ensuring enrollment of absolutely everyone, throughout life.

Medigap is another bad idea brought to us by the private insurance industry. It works well for insurers, but not so well for too many patients. We should dump it along with the rest of the private insurance industry and establish our own equitable, publicly-funded and publicly-administered single payer system. How can we leave so many of our disabled residents hanging like we do?

On Kenneth Thorpe’s Analysis of Senator Sanders’ Single-Payer Reform Plan

By David Himmelstein and Steffie Woolhandler
The Huffington Post, January 29, 2016

Professor Kenneth Thorpe recently issued an analysis of Senator Bernie Sanders’ single-payer national health insurance proposal. Thorpe, an Emory University professor who served in the Clinton administration, claims the single-payer plan would break the bank.

Thorpe’s analysis rests on several incorrect, and occasionally outlandish, assumptions. Moreover, it is at odds with analyses of the costs of single-payer programs that he produced in the past, which projected large savings from such reform (see this study, for example, or this one).

We outline below the incorrect assumptions behind Thorpe’s current analysis:

1. He incorrectly assumes administrative savings of only 4.7 percent of expenditures, based on projections of administrative savings under Vermont’s proposed reform.

However, the Vermont reform did not contemplate a fully single-payer system. It would have allowed large employers to continue offering private coverage, and the continuation of the FEHBP and Medicare programs. Hence, hospitals, physicians’ offices, and nursing homes would still have had to contend with multiple payers, forcing them to maintain the complex cost-tracking and billing apparatus that drives up providers’ administrative costs. Vermont’s plan proposed continuing to pay hospitals and other institutional providers on a per-patient basis, rather than through global budgets, perpetuating the expensive hospital billing apparatus that siphons funds from care.

The correct way to estimate administrative savings is to use actual data from real world experience with single-payer systems such as that in Canada or Scotland, rather than using projections of costs in Vermont’s non-single-payer plan. In our study published in the New England Journal of Medicine we found that the administrative costs of insurers and providers accounted for 16.7 percent of total health care expenditures in Canada, versus. 31.0 percent in the U.S. – a difference of 14.3 percent. In subsequent studies, we have found that U.S. hospital administrative costs have continued to rise, while Canada’s have not. Moreover, hospital administrative costs in Scotland’s single-payer system were virtually identical those in Canada.

In sum, Thorpe’s assumptions understate the administrative savings of single-payer by 9.6 percent of total health spending. Hence he overestimates the program’s cost by 9.6 percent of health spending — $327 billion in 2016, and $3.742 trillion between 2016 and 2024. Notably, Thorpe’s earlier analyses projected much larger administrative savings from single-payer reform — closely in line with our estimates.

2. Thorpe assumes huge increases in the utilization of care, increases far beyond those that were seen when national health insurance was implemented in Canada, and much larger than is possible given the supply of doctors and hospital beds.

When Canada implemented universal coverage and abolished copayments and deductibles there was no change in the total number of doctor visits; doctors worked the same number of hours after the reform as before, and saw the same number of patients. However, they saw their healthy and wealthier patients slightly less often, and sicker and poorer patients somewhat more frequently. Moreover, the limited supply of hospital beds precluded the kind of big surge in hospitalizations that Thorpe predicts. In health policy parlance, “capacity constraints” precluded a big increase in system-wide utilization.

Thorpe bases his estimates on what has happened when a small percentage of people in a community have had copayments eliminated or added. But in those cases there are no capacity constraints, so it tells us little about what would happen under a system-wide reform like single-payer.

Thorpe does not give actual figures for how many additional doctor visits and hospital stays he predicts. However, his estimates that persons with private insurance would increase their utilization of care by 10 percent and that those with Medicare-only coverage would increase utilization by 10 to 25 percent suggest that he projects about 100 million additional doctor visits and several million more hospitalizations each year – something that’s impossible given real-world capacity constraints. There just aren’t enough doctors and hospital beds to deliver that much care.

Instead of a huge surge in utilization, more realistic projections would assume that doctors and hospitals would reduce the amount of unnecessary care they’re now delivering in order to deliver needed care to those who are currently not getting what they need. That’s what happened in Canada.

3. Thorpe assumes that the program would be a huge bonanza for state governments, projecting that the federal government would relieve them of 10 percent of their current spending for Medicaid and CHIP — equivalent to about $20 billion annually.

No one has suggested that a single-payer reform would or should do this.

4. Thorpe’s analysis also ignores the large savings that would accrue to state and local governments — and hence taxpayers — because they would be relieved of the costs of private coverage for public employees.

State and local government spent $177 billion last year on employee health benefits – about $120 billion more than state and local government would pay under the 6.2 percent payroll tax that Senator Sanders has proposed. The federal government could simply allow state and local governments to keep this windfall, but it seems far more likely that it would reduce other funding streams to compensate.

5. Thorpe’s analysis also apparently ignores the huge tax subsidies that currently support private insurance, which are listed as “Tax Expenditures” in the federal government’s official budget documents.

These subsidies totaled $326.2 billion last year, and are expected to increase to $538.9 billion in 2024. Shifting these current tax expenditures from subsidizing private coverage to funding for a single-payer program would greatly lessen the amount of new revenues that would be required. Thorpe’s analysis makes no mention of these current subsidies.

6. Thorpe assumes zero cost savings under single-payer on prescription drugs and devices.

Nations with single-payer systems have in every case used their clout as a huge purchaser to lower drug prices by about 50 percent. In fact, the U.S. Defense Department and VA system have also been able to realize such savings.

In summary, professor Thorpe grossly underestimates the administrative savings under single-payer; posits increases in the number of doctor visits and hospitalizations that exceed the capacity of doctors and hospitals to provide this added care; assumes that the federal government would provide state and local governments with huge windfalls rather than requiring full maintenance of effort; makes no mention of the vast current tax subsidies for private coverage whose elimination would provide hundreds of billions annually to fund a single-payer program; and ignores savings on drugs and medical equipment that every other single-payer program has reaped.

In the past, Thorpe estimated that single-payer reform would lower health spending while covering all of the uninsured and upgrading coverage for the tens of millions who are currently underinsured. The facts on which those conclusions were based have not changed.

Drs. David Himmelstein and Steffie Woolhandler are professors of health policy and management at the City University of New York School of Public Health and lecturers in medicine at Harvard Medical School. The opinions expressed here do not necessarily reflect the views of those institutions.

http://www.huffingtonpost.com/david-himmelstein/kenneth-thorpe-bernie-sanders-single-payer_b_9113192.html?1454092127

PNHP note: Physicians for a National Health Program (PNHP) is a nonprofit, nonpartisan, educational and policy research organization that neither supports nor opposes any candidate for public office nor any political party.

Policy experts debate viability of Sen. Bernie Sanders’ health care plan

Airtalk with Larry Mantle
Southern California Public Radio, KPCC, Jan. 28, 2016

PNHP note: The following are excerpts from an unofficial transcript of a debate between Dr. Steffie Woolhandler of Physicians for a National Health Program, a practicing primary care physician and professor in the City University of New York School of Public Health at Hunter College, and Avik Roy, senior fellow at the Manhattan Policy Institute and current health care adviser to Marco Rubio. Only the remarks of Dr. Woolhandler, PNHP’s co-founder, have been transcribed here. A link to the full audio of the debate is provided at the end.

Host Larry Mantle (LM): So Bernie Sanders’ claim is that if you take the profit out of American health care on the insurance side that there are huge savings there. If the government can negotiate with a position of great leverage drug manufacturers, you can drive down prescription drug rates. And without Americans having to pay health premiums, that the taxes would essentially even out with the savings that would be provided. We’re going to examine that claim and talk about what impact overall Sanders’ proposal would have on the American health care system.

With us is Dr. Steffie Woolhandler with Physicians for a National Health Program, an organization that advocates universal, comprehensive, single-payer national health care. Dr. Woolhandler, thank you for being with us. We appreciate it.

Steffie Woolhandler (SW): My pleasure.

LM: So first of all, let’s talk about, just real briefly, how a system like this would work. It sounds like he’s saying this would work for everybody the way Medicare works for seniors.

SW: Yes, and actually it would work a little bit better than Medicare works. Canada does have a single-payer program. It covers 100 percent of health care costs, first dollar to last dollar, for doctors’ care, for hospital care. Some provinces have pharma care, some don’t. When you have pharma care then drugs are folded in as well. The reason Canada can do this affordably is because they get such huge administrative cost savings by eliminating private health insurance. Total administrative costs in health care are only about 16 percent of spending in Canada. You have to compare that to 31 percent of total U.S. health spending that goes for overhead and paperwork and administration. So the difference between those percentages is about 14 percent of total health spending that you can save through administrative simplification with a single payer is a huge amount of money, about $400 billion annually that would be freed up to improve care.

LM: Let’s talk about what the federal government, in expense, would have to do ramp up though, because already Medicare fraud is a huge expense to taxpayers. So presumably you’d have to bulk up the federal government’s capacity to investigate fraud considerably, you’d have to build a much larger federal infrastructure for health care. How would that cost compare to what the costs are for the private insurers.

SW: You’re absolutely wrong on that. In fact, if you have a single-payer system it’s potentially easier to identify fraud. So there was, for instance, a doctor in Canada who was billing for $125,000 worth of urinalysis tests, which is a ridiculous number of tests. That’s fraud. It was very easy to detect because all of the bills were sent to the single payer, and you could see what’s going on. So actually you’re in a much better position to identify and eliminate fraud if you have a single payer that sees all of the bills that the doctors and the hospitals send. The other thing I want to say is that we know how much a public bureaucracy costs. We can look at Canada, where the overhead on insurance is about 1 percent. We can look at our Medicare program, our traditional fee-for-service Medicare program. That overhead is about 2 percent. And you have to compare that to the overhead in private insurance firms which averages about 14 percent, but sometimes rises as high as 20 percent. So you get huge insurance overhead savings due to single payer, that’s not theoretical – we know it’s true from the data from our own Medicare program and the Canadian single payer.

LM. OK. Also, on the issue of doctor and hospital reimbursements, because the government wouldn’t employ physicians directly or hospitals, but that’s where the reimbursements would come from. How would the government keep doctors from opting out, at least some of them, in setting up boutique sorts of practices as we’re already seeing with some physicians leaving Medicare?

SW: Well Canada has a rule that if you accept any money from the public Medicare system, you have to be completely in the system, you have to take any patient in the system. There’s a handful of doctors who have opted out of Canada’s single payer, I think less than a dozen, but the overwhelming majority of doctors end up participating in the system because of the rule of 100 percent in, or 100 percent out. Now there are a couple of cosmetic surgeons who do things that aren’t covered by the single payer, but that’s a different story, but for most routine medical care the doctors are pretty much 100 percent participating in Canada.

LM: So the doctors would all – they couldn’t really set their rates. They’d all be paid the same, the great doctors, the mediocre doctors. Everybody gets paid the same under this.

SW: Well, that’s true at some level. Different specialties doing different things get paid slightly different amounts in Canada. What happens in Canada is that doctors’ fees are set by some combination of negotiation and regulation. The provincial medical society, which is like our state medical society, comes up with a fee schedule for the entire set of doctors in the province and they negotiate that with the provincial government. It’s rather contentious, but at the end of the day the Canadian doctors have done extremely well. Canadian primary care doctors are paid just as much as primary care doctors in the United States, and specialty doctors in Canada are paid somewhat more than primary care doctors in Canada, but not the huge kind of salaries that some high-paid specialists can reap in the United States. But the doctors are doing just fine financially; we know that because Canadian doctors can immigrate to the United States, and the net immigration is zero. They’re simply not crossing the border to come to the U.S. at this point.

LM: In Canada, if you’ve got a really expensive city like Vancouver to live in, do doctors there get an extra bump in their reimbursement for their overhead?

SW: The rates are set at the provincial level, and I assume there’s some bump for very high costs – when it’s expensive to run a practice. I’m not sure of that, but it does vary from province to province.

LM: We’re talking with Dr. Steffie Woolhandler of Physicians for a National Health Program. Talking about Sen. Bernie Sanders’ proposed Medicare for all, single-payer health care program. If you have questions about Bernie Sanders’ proposal, I know there’s a lot of you who are pro or con on it, and we are most interested in questions that you may have about it – the economics of it, how it would work, as opposed to just saying yea or nay. If you want to call in and take part, I welcome your questions. …

[At this point Mantle speaks with Avik Roy, who argues, inter alia, that under a single-payer program doctors and hospitals would have to take significant cuts in reimbursements, that Canadians face very long wait times to see a doctor or get treatment, can’t get the care they need and therefore travel to the U.S. to get it.]

LM: Let’s take the first point that doctors and hospitals would have to take significant cuts in reimbursements.

SW: The doctors in Canada are doing just fine. Their incomes are similar to primary care doctors in the United States. The hospitals are doing just fine. They’re not in bankruptcy, they have big modern hospitals that provide care. The insurance companies took a major hit under single payer. They were more or less put out of the health care business. The drug companies took a major hit under single payer. Their prices ended up being cut in half. And the device industry takes a bit hit – their prices are cut in half. So it’s bad for insurers, the drug industry and device manufacturers, but it is not bad for doctors and hospitals, and frankly, it is not bad for patients. I was an attending physician at the Massachusetts General Hospital at Harvard Medical School, a world leader in medical care. We had patients from all over the world come to Mass General to get our services, but we did not see patients from Canada, despite being less than a 4-hour drive from the border. Canadian patients do not come to the United States in droves and that’s not just my anecdotal impression, that’s what’s been found when people have studied it. Avik’s figures about waiting lists are wildly exaggerated. The provinces post their wait times on the Internet; you can go and look at how long it would take, for instance, a prostate surgery. In British Columbia, it’s something like days to weeks. We’re not talking about months and years the way he’s implying. The Canadian public would not tolerate this kind of wait, and it’s a rumor that has been perpetrated by The Wall Street Journal, by conservative analysts like Avik, that everybody’s waiting for care, that they’re streaming across the border to get in the U.S. – it’s simply not the reality on the ground.

LM: Why do people then come to the U.S. for health care? What’s driving them?

SW: OK. There was a giant survey of 18,000 Canadians. Fewer than 100 had received health care in the United States in the past year. And all but 18 of those had been in the United States on vacation or business when they got acutely ill and had to get emergency care. There were only 18 cases of people who come to the United States in order to get medical care, and in many of those cases their own province had given them the money and said, “You can go across the border because you live near the border and the service is available there that you need.” So we’re not talking about a massive number of not being able to get the care that they need, in fact, the overwhelming majority of Canadians do get the care that they need, which is why the overwhelming majority of Canadians support their national single-payer program.

…

[A medical student in Houston calls in to ask if single payer would reduce reimbursements to doctors, exacerbating the problem of medical student debt because of high tuition rates.]

SW: I am a medical school faculty member, I have two children in medical school and we’re paying tuition, so I’m aware of the problem. Physicians for a National Health Program, the group I work with, put out a proposal and said medical school tuition should be free, because those costs are eventually paid back by the payers, by the single payer. You can pay for the tuition up-front – make med schools free – or you can make the students go into debt and pay it off over time. One way or another it’s going to be paid by the taxpayers under single payer. And we think it’s fair and more efficient and better for everyone if you just make medical school free. I would point out that Sen. Sanders has also advocated free tuition, but I’m not speaking on behalf of Sen. Sanders, I’m speaking on behalf of single payer here today.

http://www.scpr.org/programs/airtalk/2016/01/28/46098/policy-experts-debate-viability-of-senator-bernie/

PNHP note: Physicians for a National Health Program (PNHP) is a nonprofit, nonpartisan, educational and policy research organization that neither supports nor opposes any candidate for public office nor any political party.

The lesson of BC/BS of NC on special enrollment periods

Obamacare Pummels Blue Cross Blue Shield Of NC–What Can We Learn From This?

By Chris Conover
Forbes, January 30, 2016

Blue Cross and Blue Shield of NC is expecting to lose more than $400 million on its first two years of Obamacare business. In response to its bleak experience with the Obamacare exchange, the company has decided to eliminate sales commissions for agents, terminate advertising of Obamacare policies, and stop accepting applications on-line through a web link that provides insurance price quotes–all moves calculated to limited Obamacare enrollment.

BCBSNC reported an operating loss of $50.6 million in 2014–the first such loss in 15 years. Why? Because its Obamacare policies lost $123 million despite $343 million in various insurer bailouts (the so-called “Three R’s“–risk adjustment, reinsurance, and risk corridors).

What makes this shocking is that BCBSNC is the state’s dominant insurer, covering 72% of the large group market. If a deep-pocketed insurer such as this cannot make a go of Obamacare, that does not bode well for many smaller carriers who do not have large profits on other lines of business with which to absorb whatever losses are generated by policies sold on the Obamacare exchanges.

The fact that one of the nation’s largest insurers, UnitedHealthcare also has raised doubts about its ability to carry plans on the healthcare law’s exchanges beyond 2016 makes clear that this problem is not unique to North Carolina.

The Problem is Getting Worse, Not Better

A large carrier such as BCBSNC can afford to absorb a temporary hit to its profits. But the evidence in NC is that Obamacare losses are growing over time rather than shrinking–a clearly unsustainable business model.

Because of its enormous losses, BCBSNC was able to convince the state’s insurance commissioner to allow a 32.5% average increase in its rates for the 2016 Obamacare policies now being sold.

Special Enrollment Period Enrollees Are a Problem

The special enrollment period is open to people whose circumstances have changed, such as getting married, having children, losing/changing jobs or similar situations. However, many such individuals evidently are staying insured only for several months, generating a lot of medical bills and then discontinuing their coverage.

People who buy their coverage during these special enrollment periods cost twice as much as Obamacare customers who secure their coverage during open enrollment.

Again, this is not unique to NC: earlier this month, in response to complaints by insurance companies, Obamacare administrators eliminated six additional conditions that allowed people to sign up for health coverage outside of the general enrollment period.  According to UPI, these steps will ”make it more difficult for persons without health coverage to financially manipulate or abuse the Affordable Care Act.”

These steps presumably will be good news for the bottom line of insurers such as BCBSNC. But they by no means eliminate various ways in which people have figured out to game the system.

University of Minnesota economist Stephen Parente has calculated that the cost of the least expensive policies on the Obamacare exchanges will more than triple in NC between 2016 and 2017!

http://www.forbes.com/sites/theapothecary/2016/01/30/obamacare-pummels-blue-cross-blue-shield-of-nc-what-can-we-learn-from-this/#6ead235634f6

***

Insurer Aetna Lays out Concerns About ACA Exchange Business

By Tom Murphy, AP
ABC News, February 1, 2016

Aetna has joined other major health insurers in sounding a warning about the Affordable Care Act’s public insurance exchanges.

The nation’s third-largest insurer said Monday that it has been struggling with customers who sign up for coverage outside the ACA’s annual enrollment window and then use a lot of care. This dumps claims on the insurer without providing enough premium revenue to counter those costs.

Both Aetna and UnitedHealth Group Inc. said the exchange customers they get outside the annual enrollment window use more health care than those who sign up within it. This includes some cases where it appears that a customer bought coverage, used it and then dropped it.

“Insurance systems tend to get stressed when people can buy coverage when they know they need it and then drop it when they know they don’t,” Chief Financial Officer Shawn Guertin told The Associated Press.

The Centers for Medicare and Medicaid Services recently outlined several changes it said it was making to help shore up exchange enrollment windows.

Blue Cross-Blue Shield insurer Anthem Inc. also is paying close attention to how the government deals with special enrollment periods as it judges how sustainable the exchange business will be in the future, CEO Joseph Swedish said recently.

UnitedHealth Group has said it will decide this year whether to participate in the public exchanges in 2017.

HealthCare.gov CEO Kevin Counihan said in a Jan. 19 blog post that special enrollment periods will not be available for “the vast majority of consumers.” HealthCare.Gov operates public insurance exchanges in 38 states.

“For example, special enrollment periods are not allowed for people who choose to remain uninsured and then decide they need health insurance when they get sick,” he wrote.

http://abcnews.go.com/Business/wireStory/insurer-aetna-lays-concerns-aca-exchange-business-36647397

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Sustaining the marketplace for a healthier America

By former Sen. Tom Daschle (D-S.D.)
The Hill, January 29, 2016

To ensure the affordability of healthcare services, we must help individuals not only access health insurance coverage, but also stay covered.
Instead, our current regulatory framework seems to be having the opposite effect.  

For example, there are over 30 “special enrollment periods” – more than that of any other federal government program, including Medicare Advantage.  Rightfully so, these periods are intended to help individuals seek coverage outside of the normal enrollment period due to certain qualifying life events, such as relocating or losing prior coverage.  However, there is little oversight in place to ensure that special enrollment period requirements are satisfied. The unintended consequence is that special enrollment periods enable individuals to only seek coverage when they need care the most – a more costly proposition for the patient and the health care system.

Fortunately, the Centers for Medicare & Medicaid Services (CMS) is already taking an important first step to help address these concerns.  CMS is eliminating six special enrollment periods that are either no longer needed or subject to abuse.

The marketplace will also require greater opportunity for innovation. 

The Affordable Care Act has demonstrated great potential for establishing a high quality, affordable health care market.  Now is the time to leverage that progress and ensure its sustainability by removing barriers that discourage market participation and incentives that make it easier to not seek care.

http://thehill.com/opinion/op-ed/267412-sustaining-the-marketplace-for-a-healthier-america

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Comment:

By Don McCanne, M.D.

The losses experienced by Blue Cross and Blue Shield of North Carolina represent a problem prevalent throughout the nation wherein patients, when they become ill, enter the system during special enrollment periods and then exit once their health care needs are met. The insurers along with CMS have diagnosed the problem. There is nothing wrong with our system of private insurers. It is the patients who are to blame because they are gaming the system.

The solution? Reduce special enrollment periods that were designed to assist patients who fell through the cracks. Instead, protect the insurers by preventing these people from getting coverage for the care that they need. Bankrupt them. That’ll show them.

Reducing special enrollment periods is being touted as one of the improvements that we need in the Affordable Care Act – the type of incrementalism that we should pursue as we reject overtures to establish a single payer national health program. We should pay no regard to the fact that this incremental tweak is designed to assist the private insurers and enhance their profits, at a cost of impairing access and affordability for far too many patients.

Wasn’t the Affordable Care Act designed to provide everyone with affordable access to health care? No. Single payer has such a design, but that was rejected to the benefit of the private insurers.

So now we are supposed to tweak the system to make it work better for patients? No. We are tweaking it to make it work better for private insurers. Damn those patients who try to cheat the insurers by gaming the system.

Oh wait. Under single payer the goal is to deliberately include absolutely everyone. The idea that someone is cheating by trying to sneak into the system is totally foreign to the stewards of egalitarian universal systems. How could anyone even think about devising methods of keeping people out? Perhaps it’s American Exceptionalism at work.